1. 6/15/2010 1 Hospital Rate Setting Methods for State Fiscal Year 2011 June 15, 2010 Department of Health Services Division of Health Care Access and Accountability 1

2. 6/15/2010 2 Agenda 1. Overview of Rate Methodology and Policy Decisions 2. FY 2011 Inpatient Hospital Rates 3. FY 2011 Outpatient Hospital Rates 4. FY 2010 Acute Care Hospital Assessment 5. FY 2011 Acute Care Hospital Assessment 6. FY 2011 Critical Access Hospital Assessment 7. Prior Meeting Issues 8. Agenda for Next Meeting 2

3. 6/15/2010 3 FY 2011 Policy Decisions 1. Appeals Policy Limit 5 Year Look Back For Cost Report –Use of Unaudited Cost Reports When Certain Criteria Met. 2. Terminate Critical Access Hospital Settlements 3. Align Rehab Rates to Psych Per Diem Calculations 4. Move EACH Payments under the UPL 5. Reform DSH Methodology to Pay DSH As a Lump Sum Payment 6. Revise Rural Hospital Payment Adjustment to Eliminate Reference to Wisconsin Historical Wage Index Calculation. 7. Wage Index Policy – Recommend In State and Out of State Index 3

4. 6/15/2010 4 Inpatient Rate Setting Methodology 1. Calculate CAH provider specific cost based rates and project payments to determine remaining funding 2. Calculate budget neutral base rate for Acute Care Hospitals, then apply provider adjustments 1. Wage Index 2. Capital 3. Direct and Indirect Medical Education 4. Rural Hospital Adjustment 5. DSH Adjustment 3. Trim Points 4

5. 6/15/2010 5 Inpatient Rate Setting Methodology (continued) 4. Calculate budget neutral per diem rates for psych and rehab hospitals. 5. Once rates established, project payments based upon projected utilization and case mix. 6. Adjust rates as necessary to remain within budget. 7. Project outcomes as a result of rate updates. 5

6. 6/15/2010 6 FY 2011 Inpatient Hospital Rates (See Handouts) 6

7. 6/15/2010 7 Outpatient Rate Setting Methodology 1. Calculate OP Medicaid cost using the Cost-To- Charge Ratio 2. Project payments for CAHs. 3. Determine remaining base funding budget for Acute Care, Psych, Rehab, Border and Out of State Hospitals 4. Apply budget neutral factor to non CAHs. 5. Project payments using projected volume. 7

8. 6/15/2010 8 FY 2011 Outpatient Hospital Rates (See Handouts) 8

9. 6/15/2010 9 FY 2010 and FY 2011 Acute Care Hospital Assessments (See Handouts) 9

10. Critical Access Hospital Assessment (See Handouts)

11. 6/15/2010 11 Prior Meeting Follow-Up Issues 1. CAH Settlements 2001-2004 2006-2010 2. Portal Access for Cost Reporting Info 3. National Health Care 4. South-East RFP 11

12. 6/15/2010 12 Agenda for Quarterly Meeting 1. Future Considerations Adjusting Trim Points Pay Labs on Max Fee Schedule 2. Pay-For-Performance for FY 2011 3. Review Assessment and Access Payments Next Meeting: Fall 2010 12

13. 6/15/2010 13 QUESTIONS?? 13